Bankruptcy Substitutes and How You Can Settle Your Debts
Understanding the Variety of Bankruptcy Substitute Options
A lot of people think of bankruptcy as a last-resort option – mistakenly, since it can provide profound debt relief and help you restart your financial life faster than just about any other option. However, most people are persuaded by misconceptions about bankruptcy, and they look at other alternatives for resolving their debt before they are willing to talk to a bankruptcy attorney in Gilbert about their options.
Here are some of the common options that many people pursue before they finally realize that talking to a Gilbert bankruptcy lawyer is going to be their best option:
Negotiate Directly with Your Creditors
If you are struggling to pay your bills, you may be juggling which creditors actually get paid each month. You may trade off, paying some one month and then others the next. Or you may just stop paying one while you take care of another until it’s paid off.
Your creditors may be willing to lower the interest rate you pay or suspend your payments for a time if they know there’s a chance you might not be able to pay them at all. Call your credit card companies, medical provider, or bank lender to find out what’s possible. Some may even have programs that provide assistance if you are experiencing hardship.
Just know that many creditors are going to be less willing to negotiate than you might think. They know they have legal options to get the debt paid, and they are going to want to get paid everything they can. Many are going to play hard ball, leaving you with few options.
Work with a Credit Counseling Agency
Credit counseling agencies can help you negotiate with your creditors, and they can give you advice about handling your debt and your finances. If you do file for bankruptcy eventually, you will have to take a credit counseling course anyway, so this is valuable information. However, credit counseling agencies are limited in what they can do to help you.
Some organizations that pose as credit counseling agencies can actually take money from you without delivering results. They promise the world, but they just create more financial trouble for you. Do your research and tread carefully if you want to work with a credit counseling agency.
Attempt a Debt Settlement
You may hit the point that you can no longer maintain your credit cards. You want to cancel them instead of defaulting on them. You can call your credit card companies and offer a settlement. For example, you may say that you can pay $100 a month for a certain number of months. You may also be able to offer to pay only a portion of what you owe.
The company may be willing to do this in order to get something for your debt rather than the nothing you might end up paying them if they refuse to settle. However, the debt will go on your credit report as a default, even if you do pay it off over time and even if you do pay all of it. But remember: Not all companies are going to be willing to even discuss this possibility with you.
You’ll find after pursuing these options for settling your debts that your best option truly is bankruptcy. When you file for bankruptcy, you do not have to ask your creditors for permission. You don’t have to rely on their goodwill. You work directly with a Glendale bankruptcy attorney and judge to have your debts discharged completely or to determine what you can pay. The bankruptcy will be a hit to your credit initially, but you’ll be able to start rebuilding your credit quickly. In many cases, you’ll restore your credit more quickly by filing for bankruptcy in Glendale than you would by continuing to struggle with high credit balances and late payments.
Call My AZ Lawyers today to talk with a bankruptcy attorney about your options for debt relief. We represent individuals seeking relief through Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll analyze your finances and help you understand which bankruptcy option would give you the most benefits, then we’ll put together the paperwork to push the filing through as quickly as possible so you can start getting the debt relief you need. Call us in Phoenix today to schedule a consultation with a Gilbert bankruptcy attorney.
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